Central Plains Bancshares, Inc. (CPBI) - 10-K Summary
Business Context and Reporting Period
Company: Central Plains Bancshares, Inc. (CPBI), a Maryland corporation and savings and loan holding company.
Subsidiary: Home Federal Savings and Loan Association of Grand Island (Home Federal Bank), a federally-chartered stock savings association.
Reporting Period: Fiscal year ended March 31, 2025.
Market Area: Southcentral Nebraska, primarily Adams, Dawson, Hall, Lancaster, Nuckolls, and Phelps counties. The economy is focused on agriculture and manufacturing.
Operations: The Company accepts deposits and invests in residential mortgage loans, commercial real estate loans, agricultural loans, and consumer loans. It operates nine branch offices and a drive-up facility in Nebraska.
Key Financial Metrics (Year Ended March 31, 2025)
| Metric | 2025 | 2024 |
|---|---|---|
| Total Assets | $508.7 million | $463.3 million |
| Total Loans (Gross) | $402.2 million | $380.2 million |
| Total Deposits | $416.2 million | $375.1 million |
| Stockholders' Equity | $83.3 million | $78.3 million |
| Net Income | $3.7 million | $3.8 million |
| Net Interest Margin (NIM) | 3.56% | 3.36% |
| Return on Average Assets | 0.76% | 0.85% |
| Allowance for Credit Losses (ACL) | $5.4 million (1.35% of loans) | $5.9 million (1.54% of loans) |
| Non-Performing Assets (NPA) | $1.4 million (0.28% of assets) | $0.7 million (0.14% of assets) |
| Cash and Cash Equivalents | $28.7 million | $11.5 million |
Material Changes vs. Prior Period
- Asset Growth: Total assets increased 9.8% ($45.4 million), driven by a 5.8% increase in gross loans and a 150.4% increase in cash and cash equivalents.
- Loan Portfolio Shift: Agricultural loans saw significant growth, increasing 117.5% to $42.8 million. Residential real estate loans increased to $161.1 million. Commercial real estate loans decreased slightly to $120.2 million.
- Deposit Growth: Total deposits increased 10.9% ($41.1 million). Interest-bearing deposits (NOW, Money Market, Savings, CDs) increased by $43.4 million, while non-interest bearing deposits decreased by $2.4 million.
- Net Income: Net income decreased slightly by 2.8% ($105,000) to $3.7 million, despite a 13.2% increase in net interest income. This was offset by a 14.1% increase in non-interest expenses.
- Asset Quality: Non-performing assets increased to $1.4 million (0.28% of total assets) from $0.7 million (0.14%) in the prior year. This increase was primarily due to a $605,000 charge-off in the Land Development and SIDs category related to land pending sale by a borrower.
- Provision for Credit Losses: Increased to $200,000 from $88,000, reflecting the charge-off activity and portfolio growth.
Guidance, Outlook, and Risks
Management Commentary:
- Management attributes the increase in net interest income to higher market interest rates and loan volume growth.
- Non-interest expense increased due to hiring additional lenders and the implementation of the 2024 Equity Incentive Plan.
- The Company maintains a "well-capitalized" status under regulatory guidelines.
- Liquidity is considered strong, with $40.5 million in available FHLB borrowing capacity and $5.0 million in a private bankers' bank line.
Risks and Contingencies:
- Interest Rate Risk: The Company is exposed to interest rate risk due to the mismatch between the repricing of assets (longer-term fixed loans) and liabilities (shorter-term deposits). Rising rates have increased deposit costs faster than loan yields in some segments.
- Concentration Risk: Significant exposure to real estate (residential and commercial) and agriculture. Adverse conditions in these sectors could impact asset quality.
- Regulatory Compliance: Subject to extensive regulation by the OCC and Federal Reserve. Changes in capital requirements or accounting standards could impact operations.
- Cybersecurity: Reliance on third-party vendors for data processing creates operational risk. The Company has not experienced a material cybersecurity incident to date.
Key Facts for Investor Verification
- Capital Ratios: Verify the "well-capitalized" status with a Total Capital ratio of 17.83% and Tier 1 Leverage ratio of 13.78%.
- Loan Concentration: Confirm the 117.5% year-over-year growth in agricultural loans and the specific underwriting standards applied to this volatile sector.
- Asset Quality Trend: Monitor the increase in non-performing assets (0.28% of total assets) and the specific $605,000 charge-off in the Land Development/SIDs category.
- Deposit Cost: Review the rising cost of funds, with the average cost of deposits increasing to 2.56% from 2.24%.
- Share Repurchases: Note the active share repurchase program; 28,139 shares were repurchased in the fiscal year at an average price of $14.74.
- Uninsured Deposits: Verify the level of uninsured deposits ($54.8 million), which represents a concentration of larger depositors.